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The coronavirus relief bill is intended to encourage small businesses to remain engaged in the economy. This means expanded business loan options and deferred payroll taxes for small businesses. Additionally, your business may be covered by Business Interruption Insurance.
The coronavirus relief bill is offering loans to small businesses. Here’s what you need to know:
As small businesses across the country are forced to shut down in efforts to contain the spread of COVID-19, many have faced drops in revenue, employee layoffs, and countless are struggling to stay afloat. It is important to remember that a business must have less than 500 employees to be considered a “small business”. This includes sole proprietors, independent contractors, and anyone otherwise self-employed. Under the CARES Act, your business can acquire loans for as much as 2.5 times payroll or $10 million (whichever is less). Any small business owners wishing to apply for these loans should begin by contacting their bank to see if they qualify.
The coronavirus relief bill is giving small businesses more time to cover payroll taxes, here’s what you need to know:
The last creditor your business wants to owe money to is the IRS. With payroll tax deferral being only one part of a major relief package it is important that your small business is prepared for the financial obstacles that may lie ahead. Figuring out whether deferment is right for your business will require some prognostication and with the amount of uncertainty in the air that may be easier said than done. We advise all businesses considering deferring their payroll taxes to consult with tax experts, bankers, and employment attorneys to best weigh their options. Your business may want to consider loans and paid leave requirements before deferring payments.
Some businesses will be covered by Business Interruption Insurance, here’s what you need to know:
The COVID-19 disease caused by the novel Coronavirus has led to major disruptions to businesses and governments alike. This pandemic is likely to spark a high volume of business interruption insurance claims but not every business will be covered. Case in point, after the Severe Acute Respiratory Syndrome (“SARS”) outbreak in 2002, many insurance companies wrote their insurance contracts to exclude virus pandemics from this type of coverage.
To determine whether your business may have interruption insurance covering it for losses associated with the Coronavirus outbreak, a qualified lawyer should review your business’s insurance policies. Businesses pay these kinds of insurance premiums precisely so they can be protected during turbulent times likes these. If your business is covered, you should make a claim without hesitation.
Adapt & Overcome has quickly become our motto at VB. We built this resource because a lot of friends and family of the firm reached out to us with questions about how the Coronavirus Pandemic and the COVID-19 government bailout would affect small businesses and individual consumers. In fact, we also built a similar resource just for consumers that you can find by clicking here. It's important we all do our part to reduce the impact the virus will ultimately have on our health and our economy. If you have found any of this information helpful we encourage you to share it with your friends and family.